On Thursday this week, March 13, 2025, the U.S. Senate Banking Committee will vote on the GENIUS Act—a bipartisan bill aimed at establishing a clear legal framework for stablecoins, focusing on reserve requirements, auditing, and licensing. Led by Senators Bill Hagerty (R-TN) and Tim Scott (R-SC), this bill not only protects users but also promotes President Donald Trump's crypto policy, aiming to make the U.S. the 'crypto capital of the world.' But how will it affect the cryptocurrency market?
GENIUS Act: New Legal Framework for Stablecoins
The #GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) aims to clarify regulations for stablecoins—digital assets pegged to fixed values like the USD. The bill requires:
1:1 Reserves: Stablecoins must be fully backed by USD or high-quality assets.
Transparent Auditing: Issuers must publicly disclose redemption policies and conduct regular audits.
Flexible Licensing: Issuers can choose federal or state licenses based on market capitalization.
International Agreement: Foreign stablecoins must comply with U.S. standards on reserves, anti-money laundering (AML), sanctions compliance, and liquidity.
Senator Hagerty emphasized: "#stablecoin improves transaction efficiency and increases demand for U.S. Treasury bonds. This bill creates a safe legal framework, promotes innovation, and supports President Trump's mission." If passed, this would be a significant step for the U.S. to lead the crypto industry.
Impact on Major Stablecoins
The bill seems to favor U.S. stablecoins like $USDC (Circle) and #RLUSD (Ripple). Lawyer Jeremy Hogan commented on X: "The reserve and AML requirements fit perfectly with RLUSD and USDC," as both are U.S.-based and comply with many proposed standards. In contrast, Tether (USDT)—the world's largest stablecoin, based in El Salvador—may face difficulties. A report from JP Morgan indicates that Tether's reserves, which include Bitcoin and commercial paper, do not meet the new standards. Tether may have to liquidate Bitcoin to comply, threatening its ability to maintain the USD peg.
Tether has appointed new CFO, Simon McWilliams, to drive comprehensive audits with BDO, aimed at alleviating criticism. However, swift regulation remains a significant challenge as the crypto market develops in a lightly regulated environment.
U.S. Power Increases, Crypto Market Volatile
The bill grants U.S. authorities the power to control digital assets within the country, including the ability to 'freeze, burn, or halt the transfer of stablecoins' if necessary. This places an operational burden on issuers, especially foreign companies. With the crypto market plummeting ($BTC $76,600, $ETH $1,760, $930 million liquidated on March 11), legal uncertainty could lead to more severe price fluctuations. Traders on Binance should monitor support at $75,000 (BTC) and resistance at $80,000 to capitalize on short-term opportunities.
Opportunities and Challenges
In the long term, the GENIUS Act could attract institutional capital into crypto, especially as stablecoins become more widely recognized. USDC and RLUSD have competitive advantages, while Tether must either adapt or lose market share in the U.S. In the short term, compliance pressures and fear sentiment (Fear Index at 24) could cause altcoins like ETH to continue declining, but it also opens up opportunities for bottom fishing in the ETH/USDT pair if the regulatory framework is smoothly passed.
Conclusion: A Turning Point for Crypto
The vote on the GENIUS Act this week is a critical milestone, shaping the future of stablecoins and reinforcing the U.S. position in the crypto industry. For Binance users, it's time to closely monitor, prepare for volatility, and seize opportunities from regulatory changes. Will Tether hold its ground, or will USDC take the lead? The answer will soon be revealed.
Risk Warning: Crypto investments are highly risky due to price volatility. Only invest money you are willing to lose.